Drumbeat: November 19, 2009

His presentation, entitled "The Gulf of Maine: What Lies Beyond the Fossil Fuel Horizon," was billed as "describing the role that off-shore wind can play in reducing Maine's unsustainable dependence on fossil fuel based energy resources."

At the Strand he pulled no punches in describing the challenge he believes we are facing. According to Simmons, heating oil will probably not even be available in five or ten years. Not only is oil running out, but fresh water is running out too, with even more dire consequences. Then he proposed a solution: floating offshore windmills that will produce both fresh water and liquid ammonia.

I found it fantastical. I do not doubt that increasing demand for oil, combined with its limited supply, is bound to make it more expensive over time, and that Maine's dependence, especially on heating oil, is a disaster in the making. What I find incredible is the idea that we are going to solve the problem by fueling our cars and heating our homes with ammonia, and that this ammonia - let alone a significant supply of fresh water - is going to be produced by windmills in the Gulf of Maine.

(Reuters) - Brazilian state oil company Petrobras on Wednesday announced strong flow rates at at the Iracema well near the giant Tupi field, that is believed to hold 5 billion to 8 billion barrels of oil.

The news will likely stimulate further interest in the country's massive offshore subsalt area, which Brazil hopes will turn it into a major player in energy markets.

OSLO (Reuters) - Norwegian oil and gas producer Statoil (STL.OL) said on Wednesday that a probe by U.S. authorities into a 2002 contract it had with Horton Investments Ltd for business development in Iran has been dropped.

Statoil said it reached an agreement with the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice and the Attorney's Office for the Southern District of New York that settled the agencies' investigations under a U.S. law relating to Statoil's dealings with Horton.

BEIJING: China's National Development and Reform Commission (NDRC), the top economic planning agency, Thursday announced a rise in the price of electricity for non-residential use by 2.8 fen (0.4 US cents) per kilowatt hour on average nationwide, as of Friday.

TransCanada Corp. , the country's largest pipeline company, said Tuesday it expects to increase tolls sharply next year on its main natural gas system from Western Canada. The company said it needs to boost the tolls paid by shippers on its mainline system to compensate for a shortfall in expected revenue in 2009 brought about by declining supplies and shipments from Western Canada's gas fields.

Already, utilities, retailers, hamburger joints and others are scrambling to prepare for the swarm of electric and hybrid vehicles, and several are market-testing on-site charging stations. The auto industry is doing its part, not only producing a burst of innovative vehicles, but also attacking some of the nitty-gritty issues, like the size of the plug.

The dwindling Arctic ice cap has launched an international race for control of northern waters: Russia, Canada, Denmark, and even China are hustling to expand their military presence, plant flags and eye those 90 billion barrels of natural gas under the cap. Now the U.S. Navy’s getting ready for the thaw, with a strategic plan to maximize the U.S. stake up north.

The Navy’s Arctic Roadmap, written by the recently launched Navy Task Force Climate Change (TFCC), opens with an acknowledgment that worldwide temperatures are on the rise — especially up north. “The Arctic is warming twice as fast as the rest of the globe. While significant uncertainty exists in projections for Arctic ice extent, the current scientific consensus indicates the Arctic may experience nearly ice-free summers sometime in the 2030s,” the document notes.

Then the Arctic Roadmap sets out a three-phase plan to secure U.S. interests in the Arctic. Because there’s a lot at stake under that melting cap: energy reserves, transport lanes and potential territory disputes.

(PhysOrg.com) -- A new study of Antarctica's past climate reveals that temperatures during the warm periods between ice ages (interglacials) may have been higher than previously thought. The latest analysis of ice core records suggests that Antarctic temperatures may have been up to 6°C warmer than the present day.

The findings, reported this week by scientists from the British Antarctic Survey (BAS), the Open University and University of Bristol in the journal Nature could help us understand more about rapid Antarctic climate changes.

Even though the Arctic Sea floor contains up to 30 percent of the world’s remaining natural gas reserves and has been identified by President Dmitry Medvedev as “Russia’s resource base for the 21st century,” a climatic quirk may limit Moscow’s ability to develop these and other natural resources anytime soon.

That quirk, which was discussed in detail at a Moscow conference last week, involves the following counter-intuitive development: As global warming has reduced the Arctic ice cap, that has contributed to an increase in the number of icebergs, thus creating a new challenge for drilling platforms and shipping there.

The example illustrates a basic principle in social psychology: that people's attitudes do not translate into action. But most environmental activism remains centered around the assumption that changing behavior starts with changing attitudes and knowledge.

"Social psychologists have now known for four decades that the relationship between people's attitudes and knowledge and behavior is scant at best," said McKenzie-Mohr. Yet campaigns remain heavily focused on brochures, flyers and other means of disseminating information. "I could just as easily call this presentation 'beyond brochures,'" he said.

At least one major program has come under fire from regulators. Last year, a Florida Power and Light green power program, called Sunshine Energy, was terminated by the state’s Public Service Commission after an audit found that promised solar power facilities were far behind schedule. The program had more than 38,000 customers, and was once the sixth-largest in the country, according to the renewable energy laboratory.

The audit also found that the vast majority of homeowners’ payments went into marketing and administration.

(Bloomberg) -- Petroleos de Venezuela SA said profit fell 67 percent from a year earlier in the first six months of the year after oil prices plunged and it cut output to meet OPEC targets.

Profit in the first half fell to $3.15 billion, the state- owned oil company known as PDVSA said in a statement posted on its Web site today

Explosive growth: Australia is becoming one of the world’s biggest exporters of gas

WALLAROOS, bandicoots and other marsupials on Barrow Island off the north-west coast of Australia will watch curiously over coming months as workers start building a huge plant to liquefy natural gas there. The project, called Gorgon after the group of gasfields lying under the seabed nearby, had been on the drawing board for 30 years before a surge in demand for gas from booming Asian countries finally got things moving. Jon Chadwick, an executive vice-president at Royal Dutch Shell, which is involved in Gorgon and several other liquefied natural gas (LNG) schemes nearby, predicts that by 2020 Australia could become the world’s second-biggest exporter of LNG (it is now fifth), surpassed only by Qatar.

(Bloomberg) -- BP Plc and its billionaire partners in TNK-BP agreed to appoint Vice President Maxim Barsky as head of the Russian oil venture from 2011, ending a shareholder conflict that disrupted operations last year.

KIEV (Reuters) - Ukrainian Prime Minister Yulia Tymoshenko, seeking to dispel European fears of a new gas war with Russia, on Wednesday said an agreement struck with Moscow in January guaranteed Russian gas transit in 2010.

DENVER — A college student who bid on and won more than $1.8 million in federal oil and gas leases last year without the intent or ability to pay will not be allowed to argue in court that he acted out of necessity to protect the environment, a federal judge ruled on Monday.

Should the United States and China be teaming up on clean urban transportation systems instead of clean cars? After the announcement of a suite of new energy partnerships between China and the United States, I sought feedback on the electric vehicle project from Lee Schipper, an energy and transportation specialist who splits his time between the University of California, Berkeley, and Stanford. He’s quite worried that the program is looking at cars mainly from an energy-efficiency context, instead of how they will shape and affect China’s fast-expanding cities in a larger sense. “Creating a zero-carbon car for China tomorrow won’t solve the much bigger problems of urban congestion, traffic fatalities and the paving over of once-beautiful cities to make room for more cars,” Dr. Schipper said. “The discussions should back up. Energy is only a means to an end. What are the ends, urban access and mobility, or cars for a small minority?”

"Asia has huge growth prospects because so far it is so underpenetrated," Christophe Inglin, Phoenix's managing director for Asia Pacific, told Reuters on the sidelines of a clean energy conference in Singapore.

The so-called smart or super grid — terms that loosely describe an upgraded electricity transmission network augmented by digital communications technology — is championed by Al Gore, the former vice president and climate change crusader; endorsed by John Doerr, the visionary venture capitalist; and pursued by countless start-ups.

Getting the thing off the ground, however, is far easier said than done.

If the United States government does not invest more money in clean technology, it risks losing out to China, South Korea and Japan, according to a new study from two American policy institutes.

Over the next five years, those three countries will together spend $509 billion in clean technology through 2013, compared with $172 billion by the United States, according to a report released on Tuesday by the Breakthrough Institute, an Oakland, Calif., policy group, and the Information Technology & Innovation Foundation, a nonpartisan research and educational institute in Washington.

Halfway through the article, we perceive the glimmer of the real agenda. To get some substance to the story and to get somebody to go on record, The Guardian spoke to John Hemmings a Member of Parliament, and chair of the UK all-party parliamentary group on peak oil and gas. (You can tell from the group’s title how alarmist Peak Oil theory is already a mainstay of British political thinking.) Mr Hemmings weighs in that, “this” – by which he means the IEA whistleblowers’ personal opinions – “all gives an importance to the Copenhagen [climate change] talks and an urgent need for the UK to move faster towards a more sustainable [lower carbon] economy.”

Ah yes, next month’s climate alarmist jamboree in Denmark that so urgently requires a shot in the arm if anything meaningful in the fight against CO2 is to come out of it. Something, by chance, about which The Guardian, the pre-eminent flag-waver for UK global warming and CO2 alarmism, has appeared increasingly concerned.

If you follow the debate around the energy/climate bills working through Congress you will notice that the drill-baby-drill opponents of this legislation are now making two claims. One is that the globe has been cooling lately, not warming, and the other is that America simply can’t afford any kind of cap-and-trade/carbon tax.

But here is what they also surely believe, but are not saying: They believe the world is going to face a mass plague, like the Black Death, that will wipe out 2.5 billion people sometime between now and 2050. They believe it is much better for America that the world be dependent on oil for energy — a commodity largely controlled by countries that hate us and can only go up in price as demand increases — rather than on clean power technologies that are controlled by us and only go down in price as demand increases. And, finally, they believe that people in the developing world are very happy being poor — just give them a little running water and electricity and they’ll be fine. They’ll never want to live like us.

Yes, the opponents of any tax on carbon to stimulate alternatives to oil must believe all these things because that is the only way their arguments make any sense.

TARUNA JAYA, Indonesia - Across a patch of pineapples shrouded in smoke, Idris Hadrianyani battled a menace that has left his family sleepless and sick -- and has wrought as much damage on the planet as has exhaust from all the cars and trucks in the United States. Against the advancing flames, he waved a hose with a handmade nozzle confected from a plastic soda bottle.

The lopsided struggle is part of a battle against one of the biggest, and most overlooked, causes of global climate change: a vast and often smoldering layer of coal-black peat that has made Indonesia the world's third-biggest emitter of greenhouse gases after China and the United States.

U.S. crude oil production for October averaged 5.36 million barrels per day, continuing at levels not seen since 2005, according to API's Monthly Statistical Report.

Crude production from the Lower 48 states averaged 4.67 million barrels per day, up from both last year and prior months. Even though crude production last October had recovered from precautionary platform shut-ins in the Gulf of Mexico in the face of hurricanes Gustav and Ike last September, output levels then were still lower than this October's by nearly 15 percent. Meanwhile, Alaskan output, at 696,000 barrels per day, slipped from last October by 2.8 percent but rebounded from this summer's lows of less than 600,000 barrels per day.

IN most ways, the Barthelmes Manufacturing Company is a typical sheet metal fabricator. Five days a week, machines here stamp out thousands of computer cases, electrical patch panels and other items for companies like United Technologies.

Yet a growing part of the company’s business is being devoted to something decidedly unindustrial: edible walls — metal panels filled with soil and seeds and hung vertically.

KALUNDBORG, Denmark (Reuters) - A new plant in Denmark has begun converting straw into bioethanol for cars, pellets for biofuel-burning power plants and molasses for animal feed to avoid the carbon emissions from fossil fuels.

Although algae is currently the most energy-dense biofuel source, the cost of producing algae oil is prohibitively expensive.

The U.S. Department of Energy estimates that the biofuel would cost around $8 per gallon at the pump. Other experts have even projected prices of more than $50 per gallon because of inefficient production and harvesting methods.

However, a team of engineers plans to investigate whether algae commercially grown in the ocean on specialized platforms could reduce the high costs of biofuel production, potentially bringing our energy economy one step closer to shifting from fossil fuels to renewable resources.

LAST June in a fjord in southwestern Norway, a 213-foot-tall wind turbine did something large wind turbines normally don’t do: it headed out to sea.

Towed by tugboats, the newly built turbine, with three 139-foot rotor blades and a 2.3-megawatt generator atop the tower, which itself was bolted to a ballasted steel cylinder extending more than 300 feet below the waterline, made its way to a spot six miles off the coast. Once in position it was moored with cables to the seafloor, about 700 feet below.

The oceans play a key role in regulating climate, absorbing more than a quarter of the carbon dioxide that humans put into the air. Now, the first year-by-year accounting of this mechanism during the industrial era suggests the oceans are struggling to keep up with rising emissions -- a finding with potentially wide implications for future climate. The study appears in this week's issue of the journal Nature.

ScienceDaily — A self-amplifying effect presently sustains monsoon winds, but it could also disrupt the circulation over land and sea. The periodical rainfall could stop from one season to another or for months within seasons. High air pollution could lead to the disruption, researchers of the Potsdam Institute for Climate Impact Research report in the Proceedings of the National Academy of Sciences, Online Early Edition. Global warming increases the risk of abrupt monsoon transitions from high-precipitation to dry periods.

The normally conservative International Energy Agency is now saying that we must act faster to prevent climate change. Not only to prevent catastrophe, but also because the longer we wait, the more difficult and expensive it becomes to achieve the greater and greater cuts that are necessary to keep worldwide temperature rise to 2 degrees Centigrade or a 3.8 degrees Fahrenheit global average.

One of the points that I’ve tried to make repeatedly in these essays is the place of history as a guide to what works. It’s a point that deserves repetition. A good many worldsaving plans now in circulation, however new the rhetoric that surrounds them, simply rehash proposals that were tried in the past and failed repeatedly; trying them yet again may thus not be the best use of our limited resources and time.

Of course there’s another side to history that’s more hopeful: something that worked well in the past can be a useful guide to what might work well in the future. I’d like to spend a little time discussing one example of this, partly because it ties into the theme of the current series of posts – the abject failure of current economic notions, and the options for replacing them with ideas that actually make sense – and partly because it addresses one of the more popular topics in the ongoing peak oil discussion, the need for economic relocalization as the age of cheap abundant energy comes to an end.

Greer's newest book, The Ecotechnic Future, builds on The Long Descent by sketching out some of the likely dimensions of the future that Greer believes lies on the other side of our descent. It doesn't devote much space to explaining why our civilization is headed for collapse, or describing how people can prepare on the individual and community levels, since these were covered in his earlier book. Instead, in a series of chapters with straightforward titles like "Food," "Home," "Community" and "Culture," it takes an in-depth look at the kinds of changes that we can expect in these and other aspects of our lives as industrial civilization winds down.

BEIJING (Reuters) - A gas shortage that has hit central and eastern Chinese provinces will give a small boost to gasoline sales by China's oil duopoly, as slower gas supplies force taxis to gas stations, industry officials said on Thursday.

But as taxis burning the clean fuel are heavily concentrated in one region -- the southwestern province of Sichuan and Chongqing municipality -- the impact on China's gasoline balance will be marginal. China is Asia's leading gasoline seller.

Mexico’s chief producing oil field, Cantarell, is in a declining level of production already representing an "emergency situation", according to the Hydrocarbon Undersecretary of the Energy Secretariat (SENER).

Perhaps there are families who live quite happily on the “100-kilometre-diet”. I believe I’m still among the majority of Canadian mothers who prefer to feed their children a more varied menu than potatoes, kale and cabbage during the winter months.

GENEVA — The economic crisis is jeopardising key energy industry investments that are needed to cope with future growth in demand and shifts to cleaner energy, executives and officials warned on Wednesday.

Executives from gas, oil and power generation firms said at a UN conference here that they were delaying and cutting back investments due to the credit crunch, the economic downturn and volatile oil and gas prices.

But, they added, fresh capital is needed to renew and expand infrastructure such as production capacity and gas pipelines, cut carbon emissions from traditional fuels or build up more costly alternative energy sources.

Global energy needs are expected to grow by more than 40 percent by 2030, according to an International Energy Agency report last week, despite a decline this year due to reduced economic activity with the recession.

(Bloomberg) -- Crude oil fell for the first time in four days as the dollar gained against the euro, dulling the appeal of commodities as a currency hedge.

Oil fell from a one-week high reached yesterday after the U.S. Department of Energy said crude stockpiles dropped unexpectedly last week. Stock markets fell across Europe on concern this year’s rally has outpaced the prospects for economic growth.

(Bloomberg) -- Air France-KLM Group, Europe’s biggest airline, is scaling back on jet-fuel hedging after swings in oil prices contributed to a quarterly loss.

Fuel costs now will be hedged over two years instead of four, and the carrier will lock in purchases for only 80 percent of its annual consumption instead of two full years, Chief Executive Officer Pierre-Henri Gourgeon said in an interview in Paris yesterday.

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, estimates that a well will produce 50,000 barrels a day from its offshore Tupi field, the biggest discovery in the Americas in more than three decades.

“Initial production at the well is estimated at 50,000 barrels a day, which confirms the high capacity for light-oil output in the Tupi area,” Rio de Janeiro-based Petrobras, as the company is known, said today in a regulatory filing.

(Bloomberg) -- Ukraine is seeking an amendment to its accord with Russia to waive fines for buying less gas than contracted this year, Ukrainian President Viktor Yushchenko said in a letter to Russian counterpart Dmitry Medvedev.

State-run NAK Naftogaz Ukrainy may be unable to prepare for the heating season starting at the end of next year, potentially threatening “the reliability of gas shipments to Ukraine and transit to other European states,” Yushchenko said in the letter posted on his Web site.

While longer contracts will remain a “core part” of E.ON’s gas supplies through its Ruhrgas unit, shorter-term buying and selling of the fuel and liquefied natural gas have increased, Tony Cocker, E.ON Energy Trading’s chief executive officer, said today at an interview at the EMART energy conference in Barcelona.

(Bloomberg) -- Azerbaijan, Europe’s closest energy ally in the Caspian basin, is threatening to sell its gas to Asian markets, pressuring the European Union to complete pipeline accords to boost its own deliveries from the region.

“If Europe takes too long putting together a solution, then all the gas in the Caspian will go to Asia,” said Elshad Nassirov, a vice president at State Oil Co. of Azerbaijan, or Socar. “It’s more serious than it seems.”

In the first two instalments of this three-part series we considered peak oil theory, the importance of the marginal cost of production and the clear trend towards higher-cost oil discoveries. Using US Department of Energy figures, we also revealed that global oil demand exceeds current production rates.

It’s now time to consider what this tells us about future oil prices. In the short term, the answer is not much. Over the long term though, the price of oil should equal the marginal cost of production.

Late last week the Energy Information Service-advised oil stocks surged by 1.762 million barrels, far more than expected, while the U.S. refinery processing rate sank to 79.7% -- the lowest level in more than two decades. Yet on Monday the price of oil jumped by $2.50 a barrel.

What is going on? We don't really know, but it is clear that the price of oil as currently constituted no longer has anything to do with the market dynamics of supply and demand.

A pioneering environmentalist who has written or co-authored more than 50 books will speak at CSU tonight on whether food shortages could be caused by global warming.

Lester Brown, who the Washington Post once called “one of the world’s most influential thinkers,” will be discuss his latest book “Plan B 4.0: Mobilizing to Save Civilization” at 7 p.m. in the main ballroom at Lory Student Center.

Readers say I’ve ignored peak oil in favor of the economic meltdown. But because of the financial crisis, the world is using one-third less than three years ago. Though no new discoveries have been found, using less oil means the impending crisis is pushed back a few years. Nothing threatens our civilization more than Peak Oil and it may come quicker if developing nations recover and pick up the slack from big users such as America.

The CHART OF THE DAY shows a widening gap between power generated with renewable fuels and total consumption. That means coal-fired plants, which are cheaper and more polluting, will increase their share in the energy mix, discharging extra heat- trapping emissions that threaten to raise the planet’s temperature, the IEA said.

TOKYO (AFP) – Smoke rose on Thursday from the world's largest nuclear power plant in Japan, which was shut down by an earthquake two years ago, but the operator said no-one was injured and there was no radiation leak.

(Bloomberg) -- The U.S., China and other major economies may more than double stimulus spending on clean energy next year after holding back most of the money promised for projects, an analyst said.

Stimulus spending on ventures such as wind parks and solar farms may more than double to $57.8 billion in 2010 from $24.3 billion this year, said Michael Liebreich, chairman of New Energy Finance, a London-based consulting firm. Green projects may secure $55.6 billion in stimulus funds in 2011.

Are politicians and business serious about effectively addressing climate change? Australia has significant raw resource availability, it drives the nation’s economy, but who would have imagined, in the face of peak oil and the damaging effects of fossil fuels, the Victorian government would be entering a minerals extraction boom with a major focus on coal.

NEW DELHI (Reuters) – India's prime minister and U.S. President Barack Obama meet next week to strengthen ties, with the emerging Asian power increasingly playing a bigger role on global issues such as climate change and trade.

STOCKHOLM (AFP) – Russia is ready to cut its greenhouse gas emissions by 20 to 25 percent by 2020 from 1990 levels, raising its target from 15 percent just weeks ahead of a UN climate summit, the EU said Wednesday.

(Bloomberg) -- Australian firefighters, spurred on by what they say are record temperatures contributing to “catastrophic code red” fire-danger warning, urged lawmakers to pass climate change legislation under debate by Senators.

Politicians threatening to block or weaken the proposed carbon reduction scheme are putting lives and properties at risk, Peter Marshall, national secretary of the United Firefighters Union, said in a statement today. The body represents 13,500 professional firefighters.

As president of the nation’s largest and oldest business association, Mr. Donohue is no stranger to sharp policy debates. During his 12-year tenure, the chamber has been outspoken on trade, tort reform, union organizing rights, financial regulation and health care. Mr. Donohue has hired an army of lobbyists and has spent hundreds of millions of dollars on advertising, advocacy and political campaigns to make sure its voice is heard. The chamber represents its generally conservative membership of 300,000 companies and local business groups on these issues without much public protest.

But climate change poses a different sort of challenge for Mr. Donohue. Many of the chamber’s big-business members are deeply split on the issue, with some standing to profit from an economy moving away from reliance on fossil fuels, while others could see devastating increases in costs.

Has spawnedhttp://www.examiner.com/x-18425-LA-County-Nonpartisan-Examiner~y2009m11d...
The Senate Permanent Subcommittee on Investigations issued a report stating that in the oil market alone, manipulated trading adds 50% to the price for consumers. Other analysts document that these parasitic “trades” more than double oil prices. When other commodity markets are accounted for, the total addition to consumer prices are between $2 trillion to $4 trillion every year.

I think the story above clearly shows how little hope there is that the public will grasp the realities of PO:

" Though no new discoveries have been found, using less oil means the impending crisis is pushed back a few years."

Even though the writer apparently understand PO the line is still so blatant. Of course the "crisis" hasn't been pushed back a few years. It's upon us today and has been for many years. The fact that the general public doesn't see it doesn't change the reality of the situation. Though the statement seems thoughtful at first I see it the same as a doctor saying he has good news: your cancer is terminal but it's alright... it won't kill you for a while yet. And this is one of our PO advocates telling the readers we're Ok for a few more years. With help like that the cornucopians can just sit back and smile.

Maybe I'm just being a little too picky this morning but I read this before I had my first coffee.

I know what you mean Treeman. Maybe the writer was just sloppy with the phrasing. But for a supposed proponent of PO to offer that were not in a crisis mode just because folks ren't acting as though it's crisis today just got to me. Like some here I feel we missed the time do began adjusting for PO at least 20 to 30 years ago. If we had beun efforts then, tried really hard and got a little lucky then maybe we could have avoided the crisis situation we're in today.

Several analysts have estimated that speculative purchases of oil
futures have added as much as $20–$25 per barrel to the current
price of crude oil, thereby pushing up the price of oil from $50 to
approximately $70 per barrel.

I don't get it. One of the common complaints of pundits - particularly from the conservative side of the fence - is the lack of faith in free markets.

When the markets operate freely as they should, the same people complain about speculators. These are grown people acting like little children who are not getting what they want.

We all speculate. Getting out of bed in the morning is a gamble. Any one of us might get run over by a bus!

Human endeavors are risky; this would include such things as starting a business, planting a crop, eating a hamburger or driving a car. Speculation is part of the price discovery process. All market participants are speculators. Together with other speculators/traders they price the risks of any given trade.

How can anyone outside the market determine what a 'fair' price is without participating? This complaint is an outler of the same argument made over and over by denialists of all stripes. They arbitrarily claim the right to set prices in markets they refuse to participate in.

If the risk in discovering, extracting, transporting, refining, storing, shipping and selling oil and its products is priced in the markets @ 25% or 27530%, that is what market participants determine. They do so by auction. There is no perfect price which is one reason why prices fluctuate.

If final customers don't like the price, they don't have to buy the product.

Risk is priced into all goods and services. Good grief!

If there is any manipulation taking place right how it is OPEC pumping over their quotas to keep prices at or below $80.

When I have several choices to fuel my car I might agree with you. Oil is a monopoly product, not a choice. I can choose to eat rice or corn based on price. What other choice do I have to replace gasoline?

You are confusing free market economic theory with free market economic practice. Free markets are abused by scum who don't know what it is like to produce a product of value. I've often wondered why a guy in a suit who makes his living pushing paper around in an air conditioned office to make money at other's expense is seen as a "success" while a laborer who puts in an honest 8 hour day in the hot sun is not.

Making money because you can "scam" the system produces nothing of value and is exactly why the economy tanked last year. Remember Enron? California certainly did not benefit from a free market for electricity when Enron traders controlled it. I don't have a solution or a replacement for a free market economy. Well, actually I do. Socialism can work in some areas where there is widespread abuse. Long, very, very long prison sentences for suits who step over the line can also help.

First of all, the system started tanking a long time prior to last year. The run- up in fuel prices began in 2000.

You have to pardon me, I'm the 'Peak Oil in 1998' dude. Traders can warp any market for a short time, then that warpage gets discounted. That's why the trend matters, what is considered speculative manipulation is usually just noise.

Markets include all participants, even the Enrons - and the Fed's and the Treasury's, too. People have tried to manipulate markets since they were invented. The manipulations will work for a little while then get priced in eventually. Markets aren't static; right now the major markets are being used as money- laundering devices. The smart money is cashing out of this economy. This is a message of the markets. Tomorrow, the markets will have another message. In this instance, they will discount the cashing- out.

The 'speculators' argument is from those who don't like the markets' message. Those in the markets can purchase their way around issues by hedging or some other strategy. Sometimes the manipulations are outside the law. such as insider trading. Pricing or anticipating risk or risk outcomes is not illegal.

As for choices, there is the choice of buying gasoline and not buying gasoline. Not buying is what has put our economy on the rocks, it's a market outcome. A shortage of fuel exists which has stranded part of the economy that relies on it. The reason the shortage isn't apparent as such is because the supply and demand are intermediated with money. The outcome is the same as an out and out shortage; rationing is by price. The rise in price is evidence of the shortage. The outcome was first a wave of asset- price bubbles as a hedge against the shortage, then labor outsourcing as another hedge, then finally bankruptcies.

I'm not imaginative to make this stuff up, it is simply the message of the various markets; real estate, labor, goods, stocks, gold, oil, etc.

Markets exist even when dominated by corners and monopolies which would not have any power without them. The USSR is a good example of markets that existed in spite of themselves; the market message to Lenin's sock puppets was 'short the USSR'. Nobody listened. The 'sure thing' of centralized Soviet authority was just another gamble, a failed one as it turned out.

I agree about the lack of real production. It's a complex problem. Few know how to make things and the learning curve for most will be steep. Nevertheless, the market for real production is just opening; values for things done will be set and some will profit if they can perceive the signals.

One way is to try and tell a story, or find an example from everyday life. In marketing parlance, this is known as "putting things in the language of the customer".

Example : when trying to explain how warmer oceans might store less gases, I was thinking about this as an example :-

"It's a warm day, and you have been working in the garden. You come inside and pull two cans of your favorite beverage from the refrigerator. You open one, with a satisfying pshhhhhtttt. The other, you leave on the counter.
Some time later, you come back and open the other can. PHSFWWWTTT!
%$#@* ! The contents are now all over your shirt.
In other words, the ability of the warmer drink to hold carbonation is reduced."

Of course, the down side is someone doesn't read the whole explanation, and comes away with the idea that the oceans are going to explode. Or, detractors start circulating this idea that I think the oceans are going to explode, and therefore I am insane and cannot be trusted.

ST - Your Can-analogy was brilliant in terms of understanding your example! Isn't there "some" Boyle-Marriott to this on a global scale (world oceans) as well or is the the globe not a closed enough system ? (free stretch to the sun and all)

Something to do with imagining the world as enclosed by a glass bubble, where air and other resources cannot go in or out. Sunlight, of course, can.

The analogy would work something like this :-

"Me : Imagine you have just been enclosed in a glass bubble, where air cannot come in or out. What do you think will happen ?

Subject : After a while, I'd suffocate!

Me: Ok, yes, you'd suffocate.

Now what if I said that a tree could be enclosed in the bubble with you, since you breathe in oxygen and breathe out carbon dioxide, and a tree can do the opposite - breathe in carbon dioxide and breathe out oxygen ?

Subject : ok, that would be better, as long as it's a fruit tree.(there's always a smart-alec)

Me : Alright, let's make it a fruit tree then....
How long do you think you could live in the bubble with a fruit tree?

Subject : until all the fruit is gone"

So maybe this is a way to demonstrate finite limits. As long as the subject is breathing only as fast as the tree can absorb the carbon dioxide, we're in balance. If the subject breathes out faster than the tree can absorb, subject suffocates.

"It's a warm day, and you have been working in the garden. You come inside and pull two cans of your soda (or beer, but I didn't say that!) from the refrigerator. You open one, with a satisfying pshhhhhtttt. The other, you leave on the counter.

Some time later, you come back and, just before you open the other can, you think, "Hey, wait. This has been sitting here a while. Hmmm. Feels kinda warm. I'd better open this carefully." So you do. PfshsssssSsSsSSssssss....!

Why do you open it slowly? It's carbonated of course! It's got bubbles of carbon. Release the pressure, the carbon comes out of the water, like with the first drink, right? Or, in the second case, heat it up *and* release the pressure, even more carbon comes out. In other words, the ability of the warmer drink to hold carbonation is reduced.

Warmer oceans equal more carbon in the atmosphere because warmer water holds less carbon. More carbon, warmer oceans, more carbon in the atmosphere, warmer oceans, more carbon in the atmosphere...

This is what we call a positive feedback loop. Positive here doesn't mean good, as you can see, but means that each cycle makes the effect bigger.

In fact, what we're really talking about now is the ability of the oceans to take in carbon. The oceans still absorb a lot of carbon, but, because we are producing carbon so fast, the top layer of the ocean can't absorb it fast enough, so a higher percentage is staying in the atmosphere... which heats up the planet... which increases the carbon staying in the atmosphere..."

ccpo
The interesting thing about this example is its relevance to everyday experience. Even an unsophisticated eight-year-old would know that a opening warm, carbonated beverage would result in spray.
In fact, as you point out, most people would know to check the temperature of the can before opening.
There must be lots more examples of this relating to peak oil, finite resources, etc etc, which bypass the blocks that go up when some folks hear the dreaded words "math" or "science".

One example I like a lot is the one about the more straws you put in a glass, the faster the contents get sucked down - credit to Colin Campbell, I believe. The downside is, when it comes to beverages, anyway, the glass can be refilled.

One example I like a lot is the one about the more straws you put in a glass, the faster the contents get sucked down - credit to Colin Campbell, I believe.

Even better analogy, if the contents of the glass is a lemon ice, at first it is easy to drink the sweet cool lemonade on top then it gets harder and harder and the flavor gets less and less and you have to go through all kinds hoops to melt the thick flavorless slurry on the bottom to get a few more drops.

Adding more straws at that point doesn't increase the flow in any of them until it all melts and is sucked out all at once...time to get a fresh lemon ice cold beer :-)

As a teacher, I am regularly using analogies and similes, of course. The various offerings for PO analogies are good examples. My contribution is of basketballs, baseballs and marbles in a (originally a haystack) pile of sand or buried in a field. Others have offered similar things.

Might be worth a post and thread dedicated to simplifying and clarifying the message: Give us your analogies and similes, please!

I use an analogy of breathing through a straw. I tell the audience to try breathing through a straw (like the ones you use for drinking). Most people have done this at some time in their life and they realize that if they are fairly still, they can breathe reasonably comfortably. I then get them to try breathing through that straw at the same time as walking moderately fast, or perhaps even going up some stairs. Eventually, they realize they cannot do it, and (a) need more straws, (b) sit down and relax or (c) remove the straw and breathe normally. The issue is that the room is full of the air they need, there is no real shortage, but their demand is too great and the ability to get the air too impaired for them to meet their demand.
This is the same for oil. The air (oil) is not going to run out. The demand (walking) outstrips our productive capacity (breathing through a straw).

yes, but the overall picture and trend does not look good. With an average "unemployment" figure around 10% (with a large number of people under employed, or not counted as unemployed for a variety of reasons), the long term outlook for America isn't that good, even if you make optimistic assumptions. (being optimistic that link suggests that the unemployment rate will be over 10% all the way through 2015)

The linked article mentions 4 million foreclosures as at the end of September. I was just watching a program on PBS where someone being interviewed said it could go to 10 million.
No recovery expected until 2012.

Leanan says layoffs are coming down. Maybe we are running out of jobs from which to lay off. Wall Street still tells CEOs that cutting employees is the way to boost short term value. This quarter's balance sheet, most of which reflects some Gov't shinanigans that created what little sales revenue, allows a statement that they exceeded expectations, and maybe even had a surprise profit [Saks for instance, last quarter].

Great! Cut a few more employees, declare success and give yourself a bonus! Go out and buy an SUV! The Dow Jones is up, what, 35%? Happy days are here again.

Interesting observation, last Saturday there was an open house for a bank owned McMansion near my house, so I figured I'd check it out. It is amazing that this model which was selling for a million at the bubble peak, but now you would have your choice of one of several for under $400K. The lady running it asked if I had a mortgage. She claimed that for mortgage holders who could prove they were struggling, they could knock $100K off of the loan balance. Obviously they are willing to take a substantial haircut in order to prevent getting stuck with yet another house.

It was about 2000 sq ft, 2 story house, on a 5000 sq ft lot, valued around $300K. Someone has turned it into a 4500 sq ft , 3 story house, with a huge 3-car garage and 6 ft wide concrete driveway, decks, etc on the market for $999K. Top-of-the-line everything - granite, double-sized appliances, full laundry, etc etc.

Too bad it's now a major energy hog, and they've built over any decent growing space. I'm not sure how a house like that will sell around here, since all our values have plummeted. What are people thinking ?

Researchers from MIT, with colleagues from IISc in Bangalore, India and HiPi Consulting in Maryland have experimentally demonstrated the conversion of heat to electricity using thermal diodes with efficiency as high as 40% of the Carnot Limit. Their calculations find that this new kind of system could theoretically reach as much as 90% of that ceiling.

By contrast, current solid-state thermoelectric devices only achieve about one-tenth of the Carnot Limit, according to MIT Associate Professor Peter Hagelstein, co-author of a paper on the new concept published 13 November in the Journal of Applied Physics.

The MIT News piece mentions "waste heat" and Carnot efficiency. Well, the so-called "waste heat" is often that energy which must be rejected to the environment at a temperature not much different than that of the local environment. Attempting to turn that thermal energy into electricity suffers the same sort of problem as that of the original source which produced the "waste". That is the Carnot efficiency problem, where a system using a cycle of some sort, such as a steam engine, must operate between a hot temperature and the local environment. If the heat from the first system is rejected at a few tens of degrees above ambient, the thermal capture scheme is strictly limited and may actually reduce the efficiency of the first system by raising the low temperature at which the first system can reject thermal energy.

Given the Carnot Limit, the actual amount of available energy may be quite small, except in the case of the exhaust of an IC engine. We don't know yet what sort of temperatures can be tolerated by these devices, thus high temperature operation limits are unknown. Time will tell whether these guys are over the top on their estimate of the utility of these devices.

The concept is not a new idea. Back in 1974, when I was briefly a grad student at Stanford, another fellow named Swanson was working on thermophotovoltaics. He got his PhD and went on to found SunPower Corporation, making PV...

Another cheery day at TOD. One posting ends, after going through the dreary, dark and dismal details, with this:

If this guy can negotiate us back to some semblance of prosperity, this will become Obama’s legacy. My feeling is no one man can do this, and it will take the entire country to unite and do what is best for us during the impending crisis so that someday there’ll be a better tomorrow.

What are the chances, do you suppose? Wizard's first rule is that people hear what they want to hear. Most Americans still believe that if you want it, all you have to do is speak it and you will get it. The new suburban megachurches have adopted this philosophy, "name it and claim it," as their God-given right. And, it is no use to talk to them or try to educate them. They not only refuse to listen, but they get hostile if you show them evidence of the truth of the situation.

Frustrating!

Sorry, Mr. President. Even if you decide to provide the leadership necessary to deal with our situation [not that we can solve it, IMO], your people will hate you if you try.

Look-any disinterested observer of the USA megachurch trend sees that what they are selling is a lot more realistic than what many posters here are selling-they are selling the USA as a competitive, rather dog eat dog, tribe against tribe society, not an overgrown Sweden or Japan as many feel it is. The whole GOD is for me trip is an attempt to sharpen the psychological edge in the competition against fellow Americans. Makes a lot of logical sense-a lot more sense than trying to get a country of 300 million governed by mostly corrupt and/or incompetent politicians to see the light.

By far the most cohesive and organized tribe in the USA is the megarich, which is in itself amusing as any mention of this reality is often met by claims of "conspiracy theory". Members of this tribe will compete for dominance, like a wolf pack, but everybody else is just part of the far larger buffalo herd to be preyed upon.

Searchinger's 'accounting error' is failure to count trees cut down and burnt and not replaced.
This would tempt forested countries to cut down their trees and burn them for electricity. There is also a danger that poor countries will clear land for biofuel crops for export instead of food crops.

NOT a fundamental flaw in carbon accounting says Searchinger but an important detail.

These tankers have been parked off our shores for months, refusing to unload their oil until prices have risen even higher. The delay makes millions for speculators... and keeps your petrol costs soaring.

With such tactics, it is not hard to see why prices at the pumps are forecast to have risen by 26 per cent in a year by this Christmas.

I am not sure if I saw a link to this before. It is a pretty strange story. Analysis of what is actually happening is fairly far astray.

Isn't this just variation #548 on the old, worn-out theme of "oil would be less expensive if only "they" (fill in the blank) stopped their wicked scheme of hoarding it rather than letting "us" have it"?

The hoarding argument by the average Joe is usually pretty lame but there is a grain of truth in it. Daily oil flows are limited. Above ground storage is limited. Ergo controlling several million to a few tens of millions of barrels can influence prices, especially at key times, for a fairly short period. As someone else noted, holding oil to affect prices cannot really change a trend's direction, but you can ride a trend, making a shortage worse, or temporarily flooding the market to force prices down. It is in these short term actions that big institutions make money on oil and other commodities.

OTOH I can appreciate the emotional aspect of this story. But I haven't seen anystories indicating anyone in England has been unable to buy gasoline or fuel oil. Though those upset folks wouldn't phrase their position in these terms but what they would like to see is the oil sellers dump more crude onto the market then there is demand and thus force competion to drive prices down. As a consumer I can go with that. Why not make US car makers sell all their inventory this month instead of taking the next 6 months or so to do it. Then they'll have to slash their prices to get folks to buy all those cars right now. I wouldn't mind see the gov't force all the makers of big sceen TV's to dump all their product on the market before Christmas (a hint in case anyone at TOD was wondering what to get the Rockman this year).

As far as the owners of the oil doing nothing in order to reap the benefits that's not quit true. First, they are paying $1 to $2 per bbl per month as a storage fee to the tanker owners. Secondly, they bought (and many probably financed and are also paying interest) the oil in the first place. And thirdly, and most importantly, they took the risk that oil prices wouldn't drop. If oil had dropped below their original purchase price I doubt many of the English would be willing to make that difference up out of their own pockets.

But, as I said initially, their reaction is an emotional response and common sense has little room in the discusion.

I just looked at some of the oldest of the 460 comments. "DailyMail reader" is a byword for braindead but here they are proposing to send the RAF out to sink them, etc. And the article's phrase "hard-pressed motorists" is a standard. As a motorist you have to be constantly resentful of how you are oppressed, not least by cyclists such as myself who couldn't afford to become a "hard-pressed motorist". The law should be changed so that people are not forced to drive if they don't want to?

BBC Essex had a whole phone-in piece about the price of petrol this week - whipping up feelings. The MSM PO story is getting ever more shrill over the last 3 months or so! ... drip, drip, drip! Even the IEA chief economist, Dr Fatih Birol is reported as saying peak oil is fast approaching - he actually is using those words in the MSM I'm amazed!

I was near Dover last week and saw several loaded tankers at anchor, I think there are a load more on the other side of the English Channel off Rotterdam - the 'man in the street' doesn't get the fact that these storage tankers are not needed to deliver fuel because supply is down - deliberately by OPEC and refiners, to keep up prices to ensure profit. It's the need to make a profit that causes the particular time of peaking of supply of any commodity, not just oil.

xeroid -- What strikes me as particularly harmful by the MSM whipping up such a frenzy is that the public will only see third party manipulations as the sole cause of any negative PO effects in the future. Then they'll assume the gov't will finally step in and make everything all better. No need to change our consumption habits...we have all the oil we'll ever need sitting in those tankers.

Then they'll assume the gov't will finally step in and make everything all better. No need to change our consumption habits..

That seems to be the perverse way humans react. Back during the 70's oil shocks the widely believed urban myth was that it was all due to a few greedy oil company execs manipulating stuff. So the conclusion seemed to be "Why me save?". Rationally I wulda thunk that even believing the myth it should been "I ain't gonna buy no oil, I don't wanna reward those bastards".

Cambridge Energy Research Associates calculates that new oil discoveries in 2009 total a lively 10 billion barrels. With oil demand still depressed and unless the world economy picks up, the real threat to further such finds therefore is lower oil prices, and the threat that would mean for pioneering exploration. Yet conservative estimates for deepwater oil in the Arctic Ocean alone are for an estimated 90 trillion barrels.

This article is by Peter C. Glover. I have no idea who this guy is, but he seems pretty liberal with adding zeroes to numbers. Conservative estimates of 90 trillion barrels of oil in the Artic Ocean according to CERA???? I've never ever heard uber-optimist Daniel Yergin mention anything this optimistic before -- not even close.

Funny people are in high demand !
10 billion new barrels discovered ... hmmm ... are these part of those 1000 (1200) billion barrels commonly known to exist as global reserves - the rest oil ?
Or maybe this new oil is "Snap Fingers"-oil , exempted traditional and lengthy field developments !

Actually, the Norwegians don't smoke much dope, but they sure do drink a lot of booze. Must be to keep themselves warm and cozy through those dark, dreary winter months. I have to admit that they do have some pretty darn good petroleum, and other types of, engineers. Unfortunately, this hasn't put a halt to their production decline. Soon they will be back to fishing, except there's hardly any cod left. Maybe they'll have to go back to cross-crountry skiing instead -- oh wait, global warming will put an end to that too.

I know what you mean Frugal. I had a couple of Norwigian geologist buddies I use to bar hop with long ago. Damn near killed me trying to keep up with them. Maybe they'll just have to revert to those old Viking way. BTW...back in the days the oil patch use to call them "blue-eyed Arabs". Not very nice but often well deserved.

Cambridge Energy Research Associates calculates that new oil discoveries in 2009 total a lively 10 billion barrels.

Did they happen to notice that oil consumption for the year was about 30 billion barrels, meaning net reserves were down 20 billion barrels? And did they realize it was a better than average year?

Yet conservative estimates for deepwater oil in the Arctic Ocean alone are for an estimated 90 trillion barrels.

I think they accidentally added three or four zeros to the end of that number. I worked for a company that drilled in the Arctic Ocean for years, explored all the likely prospects, and didn't find anything interesting. It was something of a learning experience for the Canadian government, which paid for 125% of the costs through tax incentives. Yes, 125%. They won't do that again.

That summer, meat was in short supply due to government requisitioning. In contrast to the modern era in which livestock is grown and slaughtered in a short time, year-round, animals in 1942 were being saved for the traditional seasonal fall slaughter. "The period of 'critical' meat shortage in the east will be over in four to six weeks," said the July 27, 1942 Press. "[L]ivestock during this season of the year is held on farms and ranges to be fattened for the fall and winter market."

In fall of 1942, housewives were lucky to find a turkey. "Turkeys are fine this year, but high [expensive]!" said the November 25 Press. "They're also plentiful, but not for civilians. The Army, Navy, Coast Guard, marines, WACS and WAVES have gobbled up so many gobblers that many markets in the larger cities won't have a turkey left on Thanksgiving Eve."

I can't imagine food rationing in the US today. And any politician who suggested Americans should go without coffee, for any reason, would be strung up. ;-)

Or after the tossing of the political structure under the bus for its failures.

And this ignores the rationing by price that the 'food insecure' now have.
http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2009/11/0575.xml

Last year, nearly 17 million children, or 22.5 per cent, lived in households in which food at times was scarce - 4 million children more than the year before. And the number of youngsters who sometimes went hungry rose from nearly 700,000 to almost 1.1 million.

There are so many things that can go wrong on the farm that one or another surely will go wrong soon on a widespread basis.

There simply aren't any real reserves anymore-those days are past.

If it could be managed politically , we might divert the grain used to feed cattle and hogs here in the states to the food market in case of a major crop failure.This would of course result in the forced slaughter of our livestock, ruining the feedlot operators but createing a temporary bonanza of cheap beef at retail.

The bank said the current crisis displays "compelling similarities" with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to "short" cyclical equities such as technology, auto, and travel to avoid being caught in the "inherent deflationary spiral". Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

I have a front load Whirlpool washer that works great. After a load of wash, I leave the door open until it dries out. I have no problems with mildew. I'm not sure why anyone even wrote a story about a problem that can be avoided if someone applies the smallest smidgen of common sense.

I notice in the photo that the US machine really is big enough to fit a dumb kid into. In the UK, machines are much smaller and everyone leaves the door open to air. And we sometimes check the filter..

As the article points out, people with small children are often told to keep washer and dryers doors shut.

Also, I suspect climate makes a big difference. The people in the article lived in Seattle...where it's pretty wet. I could imagine the machine never fully drying out in a humid climate, especially if you use it every day.

(I'm really surprised that the average family does eight loads a week. That seems like a lot to me.)

We recently switched to HE front-loaders in my apartment building, and I've noticed that water tends to accumulate in them the way it didn't in the old top-loaders. I often find myself searching for a dry one.

One load a day isn't much. I'd say we do 3. When all the kids were little, 5 wasn't unusual.

Actually, I'd think a daily use would keep it washed free of mold. We leave our door open most of the time, but the only time it smells moldy is if we leave wet towels in it overnight -- and another wash cycle fixes that.

Of course, she also took some laundry-control measures. We had clean underwear every day, but were taught to wear shirts and pants more than once, and to change out of our school clothes as soon as we got home. I think my dad wore his work clothes for a week at a time. (They got so dirty so quickly there kind of wasn't any point in washing them too often.)

"What if, as one recent book title suggests, gasoline hits $20 per gallon? Gone will be one of the foundations of our American way of life: freedom of inexpensive travel. When we started out on our quest to ensure the continuation of this American freedom, we focused primarily on the 2 cents per mile that our vehicle costs in energy … and the fact that every mile driven with US made electricity was one less mile paying for fuel that supports individuals and leaders in countries that despise our American freedoms. We wanted to provide the 70 million people who commute alone less than 40 miles daily to work with a No more Gas alternative … and doing it with a vehicle that is fun to drive and be seen in was an added bonus! "

Excerpt one:
"And one more caveat: do not mistake demand for oil with oil production capacity. This distinction seems simple enough, but in my experience people sometimes confuse these issues. Suppose, for instance, that the global economy Crashed Big Time, and oil consumption fell to 79 million barrels-per-day. That would certainly have a devastating effect on future oil production via low prices & investment, but it would not mean that the world oil production capacity had fallen to 79 million barrels-per-day."

Excerpt two:
"If I am to take the Uppsala’s 2008 world oil outlook seriously, I would also have to believe that the world currently has little or no spare oil production capacity. No serious oil analyst believes this..."

Q: Is "production capacity" different than the use of the phrase "productive capacity" (CERA's term)?

It is my opinion that OPEC does have about two million barrels per day spare capacity right now. However they had virtually none last July. They were all then producing flat out.

Okay here is the real kicker, where Uppsala is mostly right and CERA is mostly wrong. It has to do with "Fields-to-be-developed". CERA is counting fields from OPEC's massive "proven reserves". That is, if these reserves are real, really proven, then they are simply fields yet to be developed. These reserves are mythical however, they do not exist therefore they can never be developed.

This lie about OPEC's over one trillion barrels of proven reserves has been repeated so many times that, in Dave's words, no serious oil analyst disbelieves it any more. The shock felt around the world will be when those serious oil analyst realize it has been a lie all along.

spindoc;
A little hint. This is a pretty intelligent crowd here. The middle school insults and beratement are making you look bad. Please just make your point without the chest jabs and maybe people will bother to listen to you.

spindoc -- And another reason to not be quit as rude is that you're alreading speaking from a rather weak position. Though it's impossible to research due to the stealthness of the effort, folks I know in the oil trading game acknowledge that the KSA is one of the largest (if not largest) oil speculators in the market. The problems is that folks tend to see hedging as different from "speculating". Different from the standpoint that one produces crude and the other doesn't but the effect on the oil market is the same. Just take a moment to consider the control the KSA has on the futures market as probably the last swing producer on the planet. If their recent actions have a secondary goal to effect the futures market it would be to benifit whatever their current position is.

It's interesting that the Saudis followed through on the pledge to try to support the $22-$28 OPEC price band in the 2004-2005 time frame, as they increased their net exports in response to rising oil prices, but then the 2006, 2007 and 2008 annual net export numbers were significantly below their 2005 rate, in response to rising oil prices. Mathematically, this was also approximately the same stage of depletion at which the prior swing producer, Texas, peaked.

They're shipping sour crude because that's what they've got left to sell.

Obviously the days of cheap, sweet, light Arabian crude are over. What they can produce nowadays looks nothing like West Texas Intermediate, so there's no point in using that as a benchmark. Now, you have to take whatever they send you and pay whatever they want for it.

Not my area Han but I think one of the major factors is the refinery design itself. Apparently it's different enough to require a significant capital expendature. It's more then just spending more money to refine sour crude in a sweet crude refinery. A refinery appears to be designed to hand one or the other. Maybe one of our resident refinery geeks can ad more to the story.

The article talks about heating with NH3. Burning NH3 produces NOx, which is both a greenhouse gas family and nasty pollutant family. Trying to use NH3 like conventional fuels is a bad idea. Fuel cells may be a different story if the final product is indeed N2 and not N2O or NO.

It seems to me that if a hydrogenated fuel is the end product then methane, methanol or dimethyl ether would be superior. These fuels have different toxicity, energy density and pressure storage requirement. If the hydrogen is renewable and the carbon is sustainable organic the combustion products water and carbon dioxide would be recycled within the biosphere.

The trouble may be that the practical EROEI turns out lousy. These hydrogenated synfuels might have to be restricted to premium applications like aviation and reserve fuel for PHEVs. Note hydrogen production can be done simpler than steam reforming or electrolysis as there is also thermal dissociation, either solar or nuke. Maybe DoE could call for demonstration plants to assess the parameters.

But the NOx forms at higher temperature burns and ammonia burns a little cool. Also, in a stoichiometric charge of ammonia and air the N from air will provide the greater amount of N, by a factor of 10 or more -- the amount of N and O available for NOx production isn't that much greater than with hydrocarbon fueled engines.

Let's just say Australia's politicians are not what you'd call resource nationalists. Rather they seem hell bent on selling the candy store as cheaply as possible. There is no plan to save some gas, either natgas or coal seam, for later generations. They haven't factored in gas as a transport fuel or the gas peaking electrical plant needed for their token wind and solar facilities. Somehow Australia can do it all; sell gas overseas and have as much as we want at home.

Re the Barrow Island bandicoots let's hope they don't get asphyxiated. It is planned to store 120 million tonnes of CO2 in a saline aquifer below the island. The State and Federal governments pick up the tab if anything goes wrong so this kind of indemnity is not unique to the nuclear industry. Note the West Atlas offshore rig that spewed a lot of oil and gas for weeks was in that area so it could happen.

I can understand why something like the idea of peak oil is inconceivable to a lot of people, because only a small percentage of the population has any real understanding of Science.

Take for example the movie 2012, which viewers have so far not questioned its underlying basis. That plot could have expounded any number of mega disaster type scenarios, but what did they choose? Excessive neutrinos! Even though the Earth has always been continually being bombarded with neutrinos with no effect we know of, suddenly it is increased solar activity on our Sun that is greatly increasing the number of neutrinos, and they heat up the core of the Earth, which liquifies the Mantle and the techtonic plates float freely causing huge chasms in the crust, massive earthquakes, tsunamis and a super volcano eruption in Yellowstone.

Neutrinos are massless, so how do they heat up the core of the Earth? There is no explanation, except our star just says, "Something's changed". So we are expected to presume neutrinos now have mass, which means the physics of the Universe has changed. Oh, ok. So why aren't they damaging our bodies?

If that isn't enough, the movie ends with a feel good scene of discovering the southern part of Africa has risen up high enough for the survivors to start humankind anew. One problem: What about the dust and ash from the super volcano eruption? Wouldn't the Earth be shrowded in a dark ash canopy cutting off light for plants to grow - ya know, food! No, the sky's are clear, with no explanation.

I suppose this is why it's possible to sell people on the idea of no imminent peaking of oil or consequences, but also why global warming is just a theory at best and hoax at worst.

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